Morning Commentary

May corn up 1 at $3.6525

May beans down 2 at $8.9375

The DOW is down

USD is stronger

Crude oil up $.55 at $56.62

Good morning,

Corn bulls are hoping to experience a better week. During the past two-weeks the corn market has trimmed roughly -20 cents per bushel from its price. Funds are thought to now be short nearly -180,000 contracts. The lack of fresh headlines surrounding Chinese trade, improved and more cooperative weather in South America, and thoughts of recharged soil moisture and more planted acres here at home has weighed heavily on the market. The trade is also digesting a more burdensome balance sheet from the USDA, who late last week, confirmed a bit more uncertainty about demand moving forward. The USDA lowered their corn used for ethanol estimate by -25 million bushels. The bigger surprise however was the -75 million bushel reduction in their U.S. export estimate, which was based on increasing global competitiveness. The reduction in overall demand forced the USDA to raise their ending stocks forecast by +100 million bushels to 1.835 billion. The short term trend is negative.  Rallies that stall at 371.75 leaves the market vulnerable to 358.5.  On the weekly chart (March), key support lies at 351.25. There should be buy stops around 374.75 in the day session.  The options market is pricing in a 356.75-373.75 trading range this week. 

Soybean bulls want to believe that U.S and Chinese leaders are close to inking a trade deal. There was talk circulating this weekend that China has agreed to make some concessions in regard to currency manipulation which is perhaps a huge step in the right direction. Top economic advisor Larry Kudlow, believes a trade deal is going to get done but has hinted to it being pushed back another month, perhaps more likely happening in April rather than March. This obviously does very little to help the old-crop story as the South American new-crop harvest will have more time to replenish their supply. The USDA made a slightly bullish adjustment to the U.S. balance sheet by adjusting their domestic crush estimate higher by +10 million bushels. U.S. exports were left “unchanged”. Unfortunately, U.S. soybean ending stocks still remain extremely burdensome at 900 million bushels. The short term trend is negative.  The market is vulnerable to a drop to 893.5-1.  Closing over 912.25 is the minimum needed to improve the outlook.  There should be buy stops around 914.25 in the day session.  The options market is pricing in a 880.5-909.5 trading range this week. 

Chemicals producer DowDuPont Inc said it would separate its material science unit, to be named “Dow,” on April 1, the first split in its planned break-up into three companies. I’m told the company will also declared a dividend for DowDuPont stockholders, who will receive one share of Dow for every three shares of DowDuPont held as of March 21. Also, Corteva, the agriculture unit, is set to separate from specialty chemical maker DuPont on June 1.

Lawmakers in Colorado want the U.S. state to study the potential of blockchain technology in water rights management. A bipartisan group of Senators and State Representatives are proposing that the Colorado Water Institute should be granted authority to study how blockchain technology can help improve its operations. The institute, an affiliate of Colorado State University should study various use cases of blockchain each, including water rights database management, the establishment of water “banks” or markets, and general administration, according to the bill.


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